HDFC Bank’s big retention problem

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Editor's note: HDFC Bank plans to double its footprint in the next five years, adding 1,500 to 2,000 branches every year. This, it hopes, will help mobilize more deposits and aid customer acquisition. With assets worth Rs 21.1 lakh crore—almost the same size as India’s total tax mop-up (direct and indirect) in the financial year 2021-22—and a capital adequacy ratio of 18.1%, it’s a financial giant. So it may seem that the stage is perfectly set for India’s largest private sector bank to expand its physical footprint.  Until you realize that there is a key ingredient missing—a stable workforce. In 2021-22, 36,113 people left the bank, almost double the number of the previous year. What makes it more alarming is that the attrition rate increases significantly as you go down the pyramid; junior-level employees, who have proved key to the bank's branch expansion plans so far, are leaving in droves. HDFC Bank did not respond to a set of queries on attrition and strategy. The high level of attrition becomes a problem because HDFC Bank is hoping to ride on branch expansion …